My time as Japanese finance minister will change the world

Reuters/Susana Vera

It will look pretty good on my LinkedIn profile – minister of finance of Japan, November 7 2023.

The incumbent, Shun’ichi Suzuki, shouldn’t be too concerned that I’m after his job. My stint in charge of the purse strings of the world’s fourth largest economy lasted just a few hours last Tuesday, and was entirely make believe.

I was invited to play the role of Japan’s finance chief in a one-day simulation of the upcoming Cop28 summit held in Abu Dhabi’s Park Rotana hotel last week. Fascinating it was too.

The organisers, the Swiss business school IMD, gathered together around 100 executives from all parts of the UAE’s business infrastructure to play out the roles of Cop national representatives, the UAE presidency and the NGOs. (No pesky media, I noticed.)

The idea was to illustrate the complexities and challenges of the much bigger real thing in a couple of weeks’ time – and also to have a crack at saving the world from the ravages of global warming and climate change.

Some 197 nations will be involved at the Cop28 site in Dubai’s Expo over a fortnight of deliberations gathering around 80,000 participants. So the IMD event was a necessarily slimmed down version.

Parties at the real Cop will gravitate to one of five main regional groupings based roughly on continental lines, with overlapping alliances like Arab States and the Small Island Developing States superimposed.

The make-believe Cop in the Park Rotana was organised into three groups, more or less corresponding to the G7 nations, the Brics countries and the rest of the world – which made for a realistically confrontational approach.

What surprised me was how quickly the participants took on the national characteristics, and climate change stances, of their allotted countries. 

With no time for preparation, I found myself wishing a hearty “kon’nichiwa” to my fellow participants at a horseshoe shaped table with a Japanese flag in front of me before launching into an enthusiastic declaration of Japan’s mission to tackle climate change.

But there was a tangible tension in the room between the USA delegation and the EU party, and pretty soon finger-jabbing accusations of pollution, protectionism and hypocrisy were flying across the room.

The Americans (represented by an Emirati lady) kept their diplomatic cool rather better than the slightly hysterical Euros (led by a Brit) under the watchful eye of the UAE presidency and a smattering of NGOs.

I’d like to think that the Japanese minister of finance, a responsible citizen of the world, kept a lofty diplomatic impartiality above the squabbling, while advancing practical but nuanced solutions to the climate change challenge.

We had been asked to prepare policy recommendations on three main areas: emissions, finance and forests.

The Europeans, predictably, wanted draconian measures to reduce emissions in a programme of which Greta Thunberg would have been proud, and also wanted the USA to cough up huge chunks of the “loss and damage” fund – as long as China (not in the room at this stage) paid even more.

We were all in favour of forests, of course, although we did get bogged down in an unnecessary tree count.

These sessions were just a warm-up for the main event after lunch: a head-on three-way collision between Europe, the USA and China in the post-lunch “stream” meetings.

It all got pretty heated, I must say, despite the best efforts of Japan to keep it all civilised.

The Euros lashed into China for all that coal burning; the Americans were defensively counting the dollars in the “loss and damage” fund; while the Cop presidency tried vainly to keep a diplomatic lid on things.

At one stage the president, getting fully into the role, called me “Your Excellency”.

The Brazilians thought they were doing enough already to combat climate change and just wanted more money from the fund. The Small Island representative wanted money and sea walls.

It all seemed pretty realistic, not least in the sense that there was no clear consensus on how to tackle the biggest challenges humanity faces.

If only they had all gone along with the Japanese stance.

The finance minister (me) laid out a fool-proof solution to the problem: maintaining hydrocarbon-fueled power for as long as necessary, but gradually and inevitably filling the gap with renewables, hydrogen and – controversially – nuclear.

“We as a nation are over Fukushima and recognise the unique attraction of nuclear power,” I found myself saying.

It was on finance that Japan played its ace card: forget the measly $100 billion of “loss and damage”, Japan wanted a multi-trillion dollar fund to finance the energy transition and R&D into climate technology, and would stump up 5 percent (Japan’s share of global GDP) of whatever sum Cop would agree on.

With that generous flourish, I handed my portfolio back to Mr Suzuki, and got a lift back to Dubai.

Frank Kane is Editor-at-Large of AGBI and an award-winning business journalist. He also acts as a consultant to the Ministry of Energy of Saudi Arabia